Droneacharya Aerial Innovations Limited

Droneacharya Aerial Innovations Limited Drone, started in 2017, is a full-fledged innovative solution, located at Pune, Maharashtra, with offices operating in Pune. Main vision of company is to encourage multiple aspects of Drones, Drone-as-a Service (DaaS) and Geographic Information System (GIS) is a system that creates, manages, analyzes and maps all the types of data. Today, they provide high-end ecosystem of Drone solutions for multi-sensor Drone surveys, data processing of Drone data using robust high configuration workstations, Drone pilot training & specialized GIS training. Their offerings can be classified into four broad categories namely, Training, Services, Surveillance and others. 1. Training: DGCA Certified Drone Pilot, Drone Building, Aerial Cinematography & Aerial Making and Drone data processing.2. Services: Consultancy services to Govt. & private organizations, reality capture data processing software, anti-drone solution for rogue UAV and UTM air traffic management solution.3. Surveillance: Land surveying and underwater services.4. Others: Partnering up with SPH Engineering from Latvia, Droneacharya is also able to provide integrated drones solutions for Bathymetry, drone hows, Hydrography, industrial and archaeological surveys, along with Environmental Monitoring. As on 30 June, 2022, they have the total strength of employees is 40 in various departments. As per financial performance, DAIL has posted total income/net profits of Rs 0.00Cr / Rs (0.02) Cr (FY20), Rs 0.01 Cr / Rs (0.15) Cr (FY21), Rs 3.59 Cr / Rs 0.41 Cr (FY22) and Rs 3.09 Cr / Rs 0.72 Cr (upto Q1 FY23). So company is new and very limited financial data is available. Company has posted an average EPS of Rs 0.40 and average RoNW of (45.49)% for last three fiscals. Issue is priced at a P/B of 1.92 as per NAV of Rs 28.16 post issue. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 315.16 and as per annualised FY23 earnings P/E is 44.98, which looks aggressively priced. As per financial statement company has around Rs 24 Cr as cash and after IPO it will be around Rs 75 Cr, but there is no plan to utilize this complete amount and the objective given in RHP can also be completed without this IPO. Comparison between listed peers is shown in above table.    On BRLM's front, Corporate Capital Ventures Private Limited is associated with this SME IPO and handled 15 SME IPOs in last 5 years. From last 10 IPOs, three IPOs opened issue below price and remaining issue above or at par. As of now from last 10 IPOs, five are trading below and remaining are trading above issue price or at par. ( As on 03.12.22 ) As per financials, DAIL has shown good results, RoNW is 2.80% and P/E is respectively 315.16 and 44.98 as per FY22 and annualised FY23 earnings, which looks aggressively priced. Also very limited financial data is available and thin promoter holding is big concern. Company is in drone solution business and future of this segment is very bright. Performance of BRLM post listing is poor. So we are giving AVOID rating to this IPO.

• 1 Mr. Prateek Srivastava
• 2 Mrs. Nikita Srivastava